GLENWOOD SPRINGS — A ballot measure before Colorado Mountain College district voters does not ask for a tax increase, per se, but could result in a net increase in taxes paid to the special district by business property owners.

However, that doesn't mean the college district would have carte blanche authority to raise taxes, said CMC Board of Trustees President Glenn Davis.

"This is about a constitutional measure approved 35 years ago that has the potential to result in a dramatic economic impact to an educational institution in our community and whether the college should have the ability to rectify that," Davis said.

Voters in the six-county CMC district, which includes Garfield, Eagle and Pitkin counties, are being asked to decide in a Tuesday, Nov. 7, mail-ballot election whether to approve Ballot Issue 4B.

The measure would allow the CMC board in given years to adjust the district's mill levy and avoid a reduction in property-tax revenues tied to the state's Gallagher Amendment. That amendment, approved by state voters in 1982, set the state property tax ratio at 55 percent for nonresidential property and 45 percent for residential.

Under Gallagher, commercial property is assessed at a fixed 29 percent rate, while the residential rate is flexible to adjust downward for increases in assessed valuation and maintain that balance.

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What was a 21 percent residential assessment rate in 1985 has been reduced by the Colorado Legislature over the years as valuations increased. But the assessment rate has held steady at 7.96 percent for the past 10 years.

Now, due to the number of new homes being built on the Front Range, which has fueled a statewide increase in residential assessed valuations, the assessment rate is being adjusted to 7.2 percent.

And the forecast from state budget officials is that the rate will go down yet again in two years to 6.2 percent.

Even as residential valuations increase within the CMC district, it's not enough to maintain the same revenue level from year to year.

The state's first Gallagher adjustment in a decade caught CMC and other special taxing districts off guard as they began preparing their budgets last spring, said Matt Gianneschi, chief operating officer for the college.

The college was able to adjust through a combination of spending reductions, a tuition increase and other means this year, he said.

What the board is now asking, though, is to be able to "recalibrate" the mill levy in future years to maintain funding levels whenever Gallagher reductions occur, Gianneschi explained.

A hypothetical analysis prepared by the college suggests that, had CMC made such an adjustment this year, residential property owners would still see a reduction in their tax bill, from $32 to $31 per $100,000 of assessed value.

However, because of the fixed rate for nonresidential property, commercial owners would see their CMC tax bill increase $7 per $100,000 of assessed value, from $116 to $123.

The Glenwood Springs Chamber Resort Association and other business organizations have endorsed the proposal, but some business interests are skeptical.

A submitted statement included in the required pro/con statements for ballot initiatives sent out by counties in the CMC district says the measure places an undue burden on commercial properties. Instead, the college should adjust its budget based on the provisions of state law, it says.

"Commercial properties in rural areas will be disproportionately affected, as a smaller number of businesses exist to pay the 55 percent, as compared to the residential properties," according to the submitted statement.

It also notes that CMC did not lower its mill levy after the 2008 recession when property values throughout the college district decreased significantly.

"The college should adapt its budget to the existing mill levy (and) the 55/45 percentage set by law," it also states.

Davis said the board already weighs a combination of spending cuts and tuition increases to balance the budget each year. The Gallagher measure just gives the college another tool to maintain funding levels, he said.

"If the forecast is accurate, the impact on CMC and other special districts would be pretty detrimental," Davis said. "If the college's revenue base diminishes over time, it will be difficult to maintain the programming we offer our students."

The ballot question does refer to a potential mill-levy adjustment this year to recoup up to $50,000 for the cost of the election. That would only be enacted if the ballot measure passes and if the board votes in favor of it, Davis said.